Last week we looked at three types of leads: cold calls, walk/call-ins and referrals. We listed the pro’s and con’s of what makes one better than another to show how the referral is the best lead source to work with.

Before diving deeper into the benefits of working with referrals, let’s re-cap the general benefits they provide. For starters, the referral requires no cost to generate. Also, the person that is referred to you typically has an immediate need for your product or service. Finally, a referral comes to you with transferred credibility from the person that referred them to you. Transferred credibility is what really sets a referral apart. Initially, the referral doesn’t know or trust you, but since they know and trust the person that referred them, they bring that trust with them to your door.

This week we will look at seven specific reasons why referrals are the preferred lead source for optimum use of time and the best lead source to spend time trying to generate.

#1 - Easy to obtain. If you have provided value, a quality product or service that solved your customer’s problem and/or helped increase their profit and did so with a level of service that they have never experienced, their referrals are yours for the…asking! The perfect time to ask for their referrals is after the purchase is made and at some point they are raving about the product or their experience with you. Do not let this opportunity pass you by! “Ed, I’m thrilled that this has worked out so well for you! Who do you know that would also appreciate what we’ve done here?”

#2 - Very low-cost. A referral usually comes to you one of two ways; they either call you directly as a result of someone giving them your name and number, or you call them after getting their name and number from your customer. As such, you don’t have to spend dollars on traditional advertising methods to get their attention multiple times before deciding to give you a call. Another cost savings is the time it takes to seal the deal…so why don’t we take a closer look at that one.

#3 - Quicker sales cycle. With transferred credibility, you only need to re-cap what the referral appreciated from your customer’s experience and build on it rather than build the trust and overcome the skepticism that comes with many customers off the street. With the skepticism removed, you can proceed directly to GO and collect your $200!

#4 - Increased conversions. As mentioned last week, a good referral will convert to a sale, upwards of 90% of the time, as long as you don’t blow it with them along the way. I can’t think of another type of lead that you can work that would have a higher conversion rate. The only one that comes to mind is Mom and she could only be referred to you once!

#5 - Referral leverage. You’ve wowed your referral and provided them with the same great product and outstanding service that you did to their friend. Asking for and receiving referrals is now almost a given. Since through referral is how they came to know you, passing you the names and numbers of others they know is now a no-brainer. You’ve now leveraged that one referral into a handful of others.

#6 - Residual referrals. Once you start working with more and more referrals, it breeds a referral mentality in both yourself and your ever increasing customer base. The number of referral customers you will work with grows exponentially over time.

#7 - Addictive! Once you get the hang of asking for and cultivating referrals, you won’t quit! You will continually look for more and more creative ways that you can ask for them and work with them.

Alright. It’s homework time. Over the past week, you identified your top 10 customers or 10 of the most recent customers that you had a great transaction with. Now, take out your list of top 10 customers and prepare an “introduction wish list” for each of them. Your wish list will contain a few of their customers that you will ask to be introduced to. (Don’t be greedy…only list a few.)

You may be able to pull together this list for each customer based on conversations you’ve had with them or you may need to do a little research. If you need to do some research on whom some of their customers are that you would like to meet, a great place to start is your customer’s brochures and websites. Many brochures will have testimonials on them along with the person/company that wrote them. Also, your customer’s website may have a tab listing their satisfied customers, references or testimonials. Check them out and copy a few down.

Next, give your customer a call. Get the conversation around to why they purchased from you and the ultimate service they received. At this point, mention that you saw they work with (insert your wish list here) and wondered if you could get an introduction to them? People, for the most part, want each other to be successful and will at least go a little out of their way to help us out.

Here is the key: Asking for an “introduction” has two benefits. One, an introduction is less invasive for your customer than blindly handing over a name and number of one of their customers. Two, an introduction opens the door to the referral, where a random call from one of their supplier’s supplier is only a knock at the door.

If you’ve never discussed your customer’s customers, and they do not have them listed somewhere in a brochure or website, when you call your customer, rather than using your wish list, try this: Ask who they know that would also benefit from your product or service as well as the manner in which you provide it.

Notice I said to ask them “Who do you know…” not “Do you know anyone…” - there is a big difference! The latter is too easy to get a “no” answer as it does not require them to put on their thinking cap. Rather, the former question is proactive and causes them to stop and think of who they know that they could introduce you to. Again, since they want their contacts to get the same benefits from you that they did, they will go through their mental rolodex to help you out. Now go fill your funnel!

In a way, sales flow just like water - both follow the path of least resistance. The more obstacles you remove from each, the better they both flow. Many people will read that and relate it to anticipating and removing objections during a presentation or while trying to close a sale. I say it starts way before that.

Improving your “sales flow” starts with the potential customer you’re working with. More specifically, it starts with how you came to work with your potential customer. Let’s take a look at a few different ways you can come upon a new customer. Starting out, the bottom of the sales lead pyramid is the cold call lead. A few reasons why this type of lead is at the bottom of the lead food chain include: 1) they are very hit-or-miss, usually they are a “miss”; 2) they carry no leverage of prospecting effort - you trade one call for one lead, and; 3) no credibility when they answer the phone or when you walk through their door.

The next kind of lead is the incoming lead. This lead could be in the form of an incoming phone call, a lead card that was returned from a mailing that was done, or someone walking into your store. With this lead, there is some leverage as they initiated the contact therefore at least having a need for your product or service. However, while they did call on you, odds are they also called on 3-5 of your competitors as well.

The type of lead that sits alone at the top of the lead food chain is the referral. There are several reasons why this type of lead is the most valued and desired type of lead. For starters, there was no cost to generate it. A person that is referred to you also typically has an immediate need for your product or service. And to top it off, a referral comes to you with transferred credibility.

The final advantage there is key. With other types of leads, you start from ground zero and have to build your credibility as well as the trust and confidence that person has in you. With referrals, since they heard of you from someone they know and probably trust, you have a huge advantage as they already have a heightened level of trust and confidence in you since you did a great job for the person that referred them to you.

With all of the advantages of working with referrals, you can see where many of the obstacles are removed up front allowing you to work directly on providing a solution. I’ve read that you stand upwards of a 90% chance of converting a referral to a sale if you handle it properly. (And you know that you will!)

So if working with referrals is the most desired source of leads, how do you go about obtaining them? First and foremost you have to provide superior value in your product or service as well as the manner in which you serve your customers. Without doing that, the referral door will never be opened for you. Assuming that is taken care of, let’s look at a few places to get those referrals.

One source of generating referrals is through your area Chamber of Commerce as they will periodically hold various mixers and events that are designed to bring people together for networking and doing business together. Some chambers also have leads groups that meet once a week specifically to generate referrals. If your Chamber does not have a leads group, there are also independent referral groups such as Business Networking International (BNI) that may have a chapter in your area. These types of groups are excellent referral generating machines.

In addition to Chambers of Commerce, you can get plugged into a local civic organization such as Rotary, Lions Club, Kiwanis, Jaycee’s, Optimist Club and countless others where you can get involved. My personal feeling here is to make a sincere commitment to the group and its mission and to volunteer your time and talents to helping them achieve their community goals. A byproduct of your involvement is meeting new people, networking and potential referrals.

One final way - and probably the most effective way - to generate referrals that we will look at this week is to simply ask for them. I am amazed at the number of people I work with that do not and have never asked anyone for a referral - whether that be a current customer, a friend or even a family member! What is amazing about this is there is no better person to get a referral from than someone that not only uses your product or service, but is a loyal customer and could sing your praises to no end.

So here is your first homework assignment. Identify your top 10 customers or 10 of the most recent customers that you had a great transaction with. You eventually are going to call them. However, for this week, really take some time to identify the 10 strongest, most loyal customers you have. Next week we will look at how to approach them for some referrals. Keep this in mind this week while you are working with your customers and I look forward to continuing this process next week!

Growing up, we all picked up on little pearls of wisdom from our Mom that we later would use in sales and business. We didn’t know it at the time, and we may have even been annoyed with the sage advice we were receiving, but in the end (as usual!) Mom always knew best. So in honor of Mother’s Day, here are 5 tips for sales and business success we learned from Mom:

1 - Think before you speak. When Mom said this, it was usually because we flew off the handle and said something we didn’t mean or that didn’t make sense. In business, it helps us understand the needs of our customers and what they need from us.

Many salespeople use their gift of gab and go in touting their product or service’s features and benefits while dominating the conversation. Although they may make a sale, the customer may often feel like they were “sold.”

Mom’s advice teaches us consultative selling where you listen much more than you speak. You ask great questions that allow your customer to tell you exactly what you need to know to provide the solution that your customer needs. With this approach, your customer feels appreciated and knows that they invested in a solution, rather than sold a bill of goods.

2 - If you don’t have something nice to say, don’t say anything at all. (Aka: Bite your tongue!) In business, this means “don’t bad-mouth your competition.” Although this is a basic principle, it still happens and bears repeating.

For me, when I hear someone bad-mouthing the competition, first, I cringe. Then I think that they cannot stand on the merits of their product or service; that they have to diminish their competition to gain any kind of position. Looking deeper into this, when you hear someone bad-mouthing their competition, many times it can give the impression that the competition is actually better.

3 - Tuck your shirt in. Mom always wanted you looking your best. Even a motley looking crew could look presentable if they at least had their shirts tucked in!

In sales and business, we must always be ready to make a positive first impression, whether you are going to see a new customer or are welcoming new customers at your store. You also never know when you may bump into that key contact that you’ve been trying to reach and need to be ready to put your best foot forward. So, tuck that shirt in!!

4 - Always wear clean underwear. Would Mom’s really worry about your underwear if you were to ever get in an accident? I would hope that would have been about the 68^th thing they’d think about if you were laid out in the hospital from being in an accident.

In the business world, Mom was preparing us to be just that - prepared. Far too many people “wing it” going into a sale or presentation. Not only be prepared with your product knowledge and presentation information and documents, but be prepared mentally as well. Your presentation may have been the 3^rd one you’ve given that day, or the 15^th one that week, but it is the very first one that your prospective client has ever heard from you. Deliver each with the same zeal and enthusiasm as the first one you did way back when you first started.

5 - The Golden Rule. Treat others the way you would want to be treated. Whenever you acted up or acted out against someone, Mom would always remind us about the Golden Rule. For the most part, this rule would be a pretty good one to follow…except in business.

In the business world, I think a variation of the Golden Rule is more applicable. Redefined, it would read “Treat others the way they would want to be treated.” This can be done as easily as it is said. As long as you think before you speak, have something nice to say, keep your shirt tucked in and wear clean underwear, you will be in tune with your prospect and know what their expectations are and how they want to be treated.

For as long as I can remember, I have been a networker. My family was recently going through some old photos, cards, etc and ran across a love letter I wrote to “Kim” back in fifth grade. The letter told her that I really liked her and asked if she liked me…followed by a box to check for YES and a box to check for NO.

But here is where the networker in me came out. After the check boxes, I wrote that if she checked NO, that I would recommend Shawn or Eric. I knew them to be pretty good guys and thought that if she didn’t like me, she should at least check one of them out instead!

To me, networking is much more than just accumulating contacts for personal gain. Networking is bringing people together for mutual gain - even if I am not one of the “people” that is brought together. Although making personal contacts is essential for gaining new business, bringing others together can also be very rewarding.

With that in mind, let’s take a look at the Top 10 benefits of Networking:

1 - Meet new people. When you attend networking events you have the opportunity to meet several new people. Take advantage of this time and do not just hang out with the people that you already know.

2 - Information gain. Networking with new people gives you the opportunity to learn more about many, many things such as: new products, new services, new technology, new resources, upcoming events, community concerns, community needs and countless other topics.

3 - Visibility. Networking keeps you and your business in the forefront of people’s mind. This is essential if you want to be the first - if not only - person they think of whenever they need your product or service.

4 - Opportunities. Through networking, you can learn about potential opportunities for new business that your competition won’t, or at least before they do.

5 - Untouchables. Networking with your contacts, clients, customers, and the new people you meet increases your ability or odds of getting a face-to-face meeting or introduction to someone that you may have been struggling to meet. You never know if that hard to reach VIP is a neighbor or a golfing buddy of someone in your network.

6 - Resource. A byproduct of effective networking is becoming a resource for others. The more people you know, and know well, the more you will be able to help others that may be in search of a particular product or resource. This leads to the next benefit…

7 - Trusted Advisor. Once you become the person to call or go to for information, contacts and advice, you’ve positioned yourself to be a Trusted Advisor - not only in general, but also in the area in which you personally sell.

8 - Referrals. One of the more obvious benefits of networking is referrals. Personally, I get as much satisfaction in giving a referral that leads to a sale as I do excitement in receiving a referral that leads to a sale.

9 - Responsibility. One of my most favorite quotes is “If you have the ability to take action, you have the responsibility to take action.” As your network grows and you make the commitment to being an effective and proactive networker, you have a certain level of responsibility to look for opportunities to pass referrals - not by obligation, but through opportunity.

10 - Having FUN! Although networking has definite business and professional benefits, it can also be a lot of fun. Meeting new people and passing referrals to them, your network and your customers can be fun and addictive.

BONUS - Karma. You may also know this as “What comes around, goes around,” Givers Gain or the Law of Reciprocity. No matter what you call it, it is very real. The more you help others and the more you pass referrals, the more it will come back to you. And usually it is greater than the level in which you gave. Try it and see for yourself. (Then let me know how it went!)

Not only are there several benefits to networking, there are also infinite ways and opportunities that you can network as well. Some of the more common ways are through organizations that are designed to help facilitate networking such as Chambers of Commerce and trade associations like the Home Builders Association and others like it. There are also groups that meet regularly and specifically to network and pass referrals.

Other networking opportunities include trade shows and business expos. You can sponsor a hole at a golf tournament and staff a table at the hole in addition to just having a sign with your logo on it. Networking opportunities can be as numerous as the people you can meet. Be creative with it and have some fun.

There are also some indirect networking opportunities. While you may join a local community organization like The Optimist Club, Rotary, Kiwanis or countless other groups for the opportunity to volunteer, give back and support a particular cause, these groups also offer opportunities to build both your personal and business networks.

There may be other benefits of networking and they may be different from one person to the next, but regardless of what the benefits are for you, there is no denying that there is Power in Networking.